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PAPUA NEW GUINEA UNEPLOYMENT RATE LIKELY TO INCREASE

HONOLULU, Hawaii (November 12, 1997 - PIDP/CPIS)---The unemployment rate in Papua New Guinea is likely to increase as a result of the most serve drought to hit this Pacific Island nation in 100 years.

The drought and killer frosts have caused major agricultural, logging and mining industries to suspend their operations.

In the Highlands region, production of coffee and tea has been cut because many estates and small producers lost plants.

Kumul Tea, one of several tea producers in Western Highlands, two months ago laid off some of its workers but promised to support them.

The logging industry also laid off some 2,000 workers when 10 major logging developers decided to scale down their operations.

The giant OK Tedi gold and copper mine in Western Province was hard hit by drought when the water level of the Fly River was reduced, making it difficult for the barges to ferry supplies and concentrated copper ore.

The mine reduced its operations and put some of its employees out of work. Other mines, including Pogera, have suspend operations twice because of the drought.

Also affected is the palm oil industry. It makes about $30 million in export earnings from its mills in West New Britain province. Other producers from New Ireland, Oro and Milne Bay provinces are facing the same fate.

Workers who pick palm fruits are unable to do so because the trees are not producing. The pickers, as well as those working in the mills, will be out of work for an extended time.

Even some public servants will be jobless by January. Prime Minister Bill Skate said the government will reduce the size of the government workforce effective early next year to save money and help the drought victims.

Pacific Islands Report is a nonprofit news publication of the Pacific Islands Development Program at the East-West Center in Honolulu, Hawai‘i. Offered as a free service to readers, PIR provides an edited digest of news, commentary and analysis from across the Pacific Islands region, Monday - Friday.